State: Let's Share Boat Dock Profits

TALLAHASSEE — Developers who make money by building boat docks as part of their condominium projects soon may be paying a windfall profits tax to the state.

The proposal by the Department of Natural Resources has received tentative support from Gov. Bob Graham and several members of the Cabinet and infuriated the Florida Homebuilders Association.

Boat docks are built on submerged land, which is owned by the state. Owners of large docks or marinas already are required to pay a submerged-lands lease, which must be renewed every five years. Lease fees, which were increased last week, amount to 7 percent of the marina's revenue.

The theory behind the proposal is that the state should share in the profit multifamily developers make because their units include marina slips.

''If someone is using state submerged land to enhance the value of the uplands, the state should share in the profit,'' said Jere Moore, Graham's chief Cabinet aide.

The agency proposal calls for a one-time fee that equals 25 percent of the developer's windfall. For example, if a developer can sell a unit for $140,000 instead of $100,000 because it includes a boat dock, the state would take $10,000. However, the actual amount taxed would be less because costs such as construction of the docks would be subtracted.

The concept disturbs homebuilders and lawyers who represent developers.

''Instead of just getting a lease value, they want a piece of the action,'' said Richard Gentry, general counsel for the Florida Homebuilders Association. ''I'm very concerned about this.

''The thing that really grabbed us is that it seems for the first time government is intruding into the profit of residential building in a way we just can't hack.''

The agency's executive director, Elton Gissendanner, said the state has never levied this kind of fee.

However, he said local governments benefit because their property taxes cover the increased value of the units.

''The ones missing getting their fair share are the trustees of the people of the state of Florida,'' Gissendanner said.

Tallahassee lawyer Steve Lewis, who represents developers on submerged- lands lease applications, said the proposal is not fair.

He said single-family homeowners don't usually need a submerged lands lease if their docks don't exceed a ratio of 10 square feet for each foot of shoreline. Nor is there a proposal for them to pay a wind-

fall fee.

However, the cumulative impact of docks at each single-family home inhibit the public's right to use that water body just as much as would a condominium's marina on the same property, he said.

''It just seems a little unfair,'' Lewis said. ''There are some real inequities in that.''

In state designated aquatic preserves -- water bodies that are environmentally sensitive -- all boat docks require submerged-lands leases and none of them can exceed the ratio of 10 square feet for each foot of shoreline. No windfall fees would be levied in aquatic preserves because of the small size of the docks.

State officials haven't calculated how much the state will make if the windfall fee is approved, said Jim MacFarland, director of the natural resource agency's Division of State Lands. He said about 100 submerged-lands leases are approved each year and that most of them are for condominium projects.

Agency officials have been directed to hold further workshops on their proposal and to formally bring it to Graham and the Cabinet for consideration. MacFarland said he hoped to do that within 60 days.

Another aspect of the agency's proposal involves limiting the number of permitted boat slips at condominiums to one for each four units. There is no limit to the number of slips, and the agency has approved as many as one for each unit.

State officials say everyone who lives on the water isn't entitled to a boat slip, with Gissendanner describing upland storage of boats as ''the wave of the future.''